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Workers should rejoin state scheme

Antonia Senior reports that the Government is shortchanging people who contract out

June 21 2003, 1:00am, The Times

MILLIONS of workers who have chosen to opt out of the state second pension system are being shortchanged by the Government, it emerged this week.

AXA, the insurer, said that the Government is underpaying the national insurance rebates paid to about 3.5 million people who choose to opt out of the state second pension (S2P) scheme, using a personal or stakeholder pension.

The declining value of the rebates will leave millions of people with reduced pensions, unless they choose to contract back into S2P, the system that replaced the state earnings related pension scheme (Serps).

Steve Folkard, head of pensions marketing at AXA, said that a 30-year-old man earning £30,000 would receive £318 a year by staying in the state second pension scheme. Choosing to…

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